AutoBeta(AutoBeta.net)05/15 Report--

On May 14, Mazda released its fiscal year 2019 results report (April 1, 2019-March 31, 2020). According to the report, Mazda achieved revenue of 3.4303 trillion yen, down 4 per cent from a year earlier, while realized profit was 43.6 billion yen, down 47 per cent from a year earlier. In terms of cash flow, as of March 31, Mazda's cash flow was-92.7 billion yen.

The last fiscal year was Mazda's lowest profit in nearly eight years, nearly halving from the previous year. As for the reasons for the decline in revenue and profits, Mazda said it was mainly due to the low demand in the automobile market caused by the spread of the COVID-19 epidemic. For the 2020 fiscal year performance forecast, Mazda also did not anticipate the spread of the epidemic on the grounds that the risk is unknown.

Mazda sold 1.598 million vehicles worldwide in 2019, down 7.2 per cent from a year earlier, according to data. In terms of specific markets, in addition to the growth in the European market, there has been a serious decline in sales in China, the United States and Japan. Of these, Mazda sold 292000 vehicles in Europe, up 7.3 per cent from a year earlier, while sales in China, the US and Japan were 278600, 227800 and 203000 respectively, down 7.2 per cent, 16.4 per cent and 7.8 per cent respectively.

COVID-19 's epidemic spread around the world, affecting the production and sales of many of its automobile markets. In March, Mazda temporarily halted production at four factories in Japan and overseas and cut production around the world by 60, 000 units in response to a slowdown in global demand caused by the spread of the novel coronavirus epidemic. Mazda suspended operations at two factories in Hiroshima and Yamaguchi in western Japan for 13 days from March 28 to April 30. In addition, Mazda temporarily closed its plant in Mexico for 10 days from March 25, and production at its plant in Thailand will be suspended for about 10 days from March 30.

Mazda said that while global car companies are gradually resuming production, production may be limited in the coming months due to weak demand and supply chain disruptions. Taking into account the difficulties in purchasing parts, the collapse in sales in overseas markets and the uncertainty of the future market, Mazda decided to adjust the production of global production facilities.

According to foreign media reports, Mazda's interest-bearing debt has exceeded 650 billion yen, which far exceeds Mazda's current cash and cash equivalents. Not only that, Mazda's market sales were in a downward phase at the beginning of the epidemic.

As the epidemic has had a serious impact on car sales and production, Mazda recently sought loans totaling 300 billion yen (21 billion yuan) from Japan's Mitsubishi Financial Group, Sumitomo Mitsui Financial Group and Japan's Mizuho Financial Group.

While there is still a risk of transmission of the overseas epidemic, the domestic market has taken the lead in picking up. According to sales figures released by Mazda in China, Mazda's sales in China rose 1 per cent to 17091 vehicles in April, with FAW Mazda selling 7071 and Changan Mazda selling 10020. From January to April, cumulative sales fell 23 per cent to 53442. FAW Mazda sold 21177 and Changan Mazda sold 32265.

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